DENVER — Colorado Attorney General John Suthers announced today that a Denver judge has sentenced John Reinholdt II (DOB: 1/10/1972) to 16 years in prison and ordered him to pay $2.5 million in restitution for his role in running a commercial Ponzi scheme.

“Criminals that defraud Colorado banks drive up the cost of home loans and other credit for all consumers,” Suthers said. “My office has worked to vigorously prosecute mortgage fraud and lending misconduct under Colorado’s criminal and consumer-protection laws. This sentence underlines the excellent work my office does in handling mortgage- and lending-fraud cases.”

According to Reinholdt’s indictment, handed down in March 2010, he used at least 19 Lafayette-based business entities to obtain loans from “warehouse” lenders at interest rates between 5 percent and 7 percent. Reinholdt used the money to make subprime loans with interest rates of at least 11.5 percent to consumers. Starting around 2006, Reinholdt used the money raised from new warehouse lenders to pay back older lenders. Reinholdt acquired the new loans using nonexistent “straw” homebuyers.

A Denver jury convicted Reinholdt in late January of violating the Colorado Organized Crime Control Act, a class-two felony; conspiracy to violate the Colorado Organized Crime Control Act, also a class-two felony; 14 counts of theft, a class-three felony; seven counts of defrauding a secured creditor, a class-three felony; and nine counts of forgery, a class-five felony.

The Office of the Attorney General worked with the Federal Bureau of Investigation to investigate and prosecute Reinholdt.